Small Incubator Certification Program 2019 Annual Report Incubator Certification Program Overview

Business incubators nurture the development Oklahoma Business of entrepreneurial companies, helping them Incubator Association survive and grow during the startup period, when they are most vulnerable. These programs The Oklahoma Association provide their client companies with business (OkBIA) was formed more than 20 years ago. The support services and resources tailored to young purpose of the OkBIA is to provide information, firms. The most common goals of incubation networking, guidance and assistance to incubator programs are creating jobs in a community, operators, as well as to work with the Legislature enhancing a community’s entrepreneurial climate, to promote and benefit business incubators and retaining in a community, building tenants. or accelerating growth in a local industry, and diversifying local economies. Oklahoma Business Incubators In 1988, the Oklahoma Legislature passed the Incubators vary in the way they deliver their Oklahoma Small Business Incubators Incentives Act. services, in their organizational structure The Act enables the tenants of a certified incubator and in the types of clients they serve. As facility to be exempt from state tax liability on they are highly adaptable, incubators have income earned as a result of occupancy for up to differing goals, including diversifying rural five years. In 2001, the Legislature amended “the economies, providing employment for and Act” to extend the tenant’s tax exemption from five increasing wealth of depressed inner cities, to 10 years. The exemption remains in effect after and transferring technology from universities the tenant has graduated from an incubator. For tax and major corporations. Incubator clients are years starting before January 1, 2020, in order to often at the forefront of developing new and qualify for the tax exemption from the sixth through innovative technologies – creating products and the 10th year, the tenant must make at least 75 services that improve the quality of our lives in percent of its gross sales to out-of-state buyers, communities around the world. to buyers located within the state if the product or service is resold to an out-of-state customer, or to The earliest incubation programs focused on the federal government. a variety of technology companies or on a combination of light industrial, technology and For tax years starting after January 1, 2020, the service firms – today referred to as mixed-use requirement for the sixth through the 10th year is incubators. However, in more recent years, new not required. The exemption will be in effect for ten incubators have emerged targeting industries years as long as the tenant graduates from a certified such as food processing, medical technologies, incubator. space and ceramics technologies, arts and crafts, and software development. Incubator Since the inception of the Act, the State of Oklahoma sponsors have also targeted programs to support has benefited from increased revenues and increases microenterprise creation, the needs of women in the number of start-up and expanding small and minorities, environmental endeavors and businesses. These businesses have created jobs telecommunications. and enhanced economic activity in the Oklahoma communities in which they are located. A business incubator’s main goal is to produce successful firms that will leave the program financially viable and freestanding, usually in Oklahoma Department of two to three years. These incubator graduates Commerce and Incubators have the potential to create jobs, revitalize The role of the Department of Commerce in the neighborhoods, commercialize new technologies, incubator process is to certify the incubators and strengthen local and national economies. pursuant to O.S. Title 74 Section 5071-79. It is Typically, 30 percent of incubator clients graduate the responsibility of the incubator owner to hire each year. managers to manage and market their incubators and provide business services to their tenants.

2 Oklahoma Incubator NUMBER OF SMALL BUSINESSES LOCATED IN INCUBATORS Program Growth 0 50 100 150 200 250 31 certified small business incubators are operating 2019 in Oklahoma, with tenants ranging from small service companies to high-tech research and 2018 development operations and manufacturing entities. 2017

During 2019, Oklahoma incubator managers were 2016 asked to complete a questionnaire to document their activities for the current reporting period. Based 2015 on the information received from the responding 2014 incubator managers: 2013 2012 127 2011 small businesses 2010 are currently leasing space 946 in Oklahoma’s full-time jobs small business NUMBER OF JOBS CREATED BY INCUBATOR CLIENTS provided by incubators incubator 0 250 500 750 1000 1250 tenants

2019 2018 NUMBER OF INCUBATORS 2017 0 10 20 30 40 50 2016 2019 2015 2018 2014 2017 2013 2016 2012 2015 2011 2014 2010 2013 2012 1,023 small businesses have located in a small business incubator, throughout the life of 2011 Oklahoma’s Certified Small Business Incubator 2010 Program. 530 of those have graduated from the program or relocated to a larger facility. 2,246 people are currently employed by 297 of those businesses that remained in the state. Incubator Standards for Success Characteristics of Model Two Core Principles That Business Incubation Programs Characterize Effective Business Incubation: Commit to business incubation’s two core principles

Obtain consensus on a mission that defines the The incubator incubator’s role in the community, then develop a aspires to have a strategic plan containing quantifiable objectives to positive impact on achieve that mission its community’s economic health by maximizing emerging 1 Structure the program for financial companies’ successes. sustainability by developing and implementing a realistic business plan

Recruit and appropriately compensate management capable of achieving the incubator’s mission and helping companies grow 2 The incubator itself is a Build an effective board of directors committed dynamic model to the incubator’s mission and to maximizing of a sustainable, management’s role in developing successful efficient business operation. companies The Best Incubators Provide: Prioritize management time to place the greatest emphasis on client assistance, including proactive advising and guidance that results in Flexible space and leases company success and wealth creation

Office services and equipment Develop an incubator facility, resources, methods and tools that contribute to the effective delivery of business assistance to client firms, as well An on-site incubator manager as a resource as address each company’s developmental needs for business advice

Develop stakeholder support, including Exposure to a network of outside business a resource network, that helps the incubation and technical consultants, often providing program’s client companies and supports the accounting, marketing, engineering and incubator’s mission and operations legal advice

Maintain a management information system Assistance with financing and collect statistics and other information necessary for ongoing program evaluation, thus improving effectiveness and allowing the program to Assistance with marketing evolve with clients’ needs

4 Success Stories Oklahoma’s incubators have many success stories. The examples below are just a few for 2019.

Ninja Technologies data on any device. This brings these Launch Pad FT veterans into the focus of efforts to combat Edmond, Okla. cyber-criminal activity.

Ninja Technologies joined Launch Pad FT Green Tree Project in June 2019. When Ninja Technologies Project 3810 was accepted to the Business Oklahoma City, Okla. Center’s incubator program they were given a highly secure and safe space to grow This is the time of year when many people their company. Ninja Technologies came welcome living trees into their homes for into the program with industry insight and the holidays, but the trees’ lives usually ready to make a meaningful change in the end as the holidays wind down. Often, the unregulated and dangerous electronics trees are simply thrown away, releasing recycling industry. Their core function is carbon dioxide into the air. However, one to help IT departments of any size, from Oklahoma City family established a rental government and non-government clients, tree business that gives new life to trees after securely recycle their used devices. the Christmas season.

Through their business planning and Much like the trees she rents out, Samantha other Launch Pad FT relationships, Ninja Walker says The Green Tree Project has Technologies was introduced to another roots. “In 2016 we had a four-year-old child local company focused on bringing service placed in our home,” Walker said. “He had members into meaningful civilian careers. been through seven homes in six months. Through this relationship, and in partnership He was a brokenhearted kid.” with the Department of Labor and the state of Oklahoma, Ninja Technologies has Walker and her husband foster children developed an educational and on-the-job with special needs. That Christmas, they training pathway program that empowers went all out for the little boy - a fresh-cut veterans to translate their military experience tree, gifts, the works. But at the end of the into a highly focused cybersecurity holidays, they found the child in tears again. program. These veterans are trained to He didn’t understand why his family would secure American interests and security. toss out the tree that brought joy to their By developing additional skills through a home, mirroring his life in foster care. “Like pathway program, the veterans are able to he had been welcomed and felt he had been shift their focus from securing our nation thrown away,” said Walker. against physical threats to cyber threats. The Ninja Technologies team of specialists So, the Walkers started doing some research focus on eliminating the risk of hackers and found trees that can grow and thrive and rogue nation states acquiring secrets in Oklahoma long after the presents are from American companies’ used devices by unwrapped and ornaments are packed away. training their teams to detect and eliminate “These are Leland Cypresses,” Walker said.

5 “We can’t work with conventional Christmas Stronghold Protection trees such as Noble Firs and Douglas Firs Group, LLC simply because they’re not meant to be in Duncan Center for Business Development this environment.” Duncan, Okla.

Because they are living trees, they still Stronghold Protection Group, LLC provides have their root ball and can be pretty security services for the cannabis industry in heavy. “We’re the only way you can order Oklahoma. The two owners, Clint and Brendan, a Christmas tree from your couch,” said started the company in the Duncan Center for Walker. Business Development incubator in October 2018, at the inception of the medical marijuana The biggest trees can weigh as much as industry in Oklahoma. In the past year the 250 pounds. That’s part of the reason The company has added 28 employees, including Green Tree Project brings the trees to you. drivers, security guards and management staff. “You schedule free in-home delivery and we Stronghold Protection Group currently secures bring it to you,” said Walker. It’s white-glove more than $5 million worth of retail product a service for living trees that don’t shed. The month. Green Tree Project crew trims them to fit your space as well. The company is in the process of buying a 10,000-square-foot facility in Norman and plans “We come back and pick it up after to make that their main transportation hub, while Christmas unless you request an invoice to adding another 10-20 jobs in 2020. purchase your tree,” Walker said. Martin Bionics Trees that aren’t purchased go to Green The Catbird Seat Tree Project partners, including OK Tree Oklahoma City, Okla. Bank Foundation and OKC Beautiful. These partners help give the trees forever homes, Martin Bionics, an incubator graduate from just like the Walkers did with the little boy The Catbird Seat at UCO, creates prosthetics and his four siblings. for amputees. The company was recently recognized in R&D World in its annual list of “He just has the purest heart and has inspired the Top 100 innovative technologies, alongside a legacy for our family,” said Walker. prestigious national research laboratories and tech companies. Rent-ready trees range in sizes and prices from $100 to $375. The company drew attention for its “socket-less socket” prosthetic design. Traditional sockets are The company currently operates in rigid and form-fitted to hold an amputee’s limb, Oklahoma City and Tulsa with hopes to but founder Jay Martin developed a lightweight, expand. dynamic structure that can be adjusted on the fly for comfort or changes in body size. A survey commissioned by the company showed most amputees claim their quality of life is limited by the discomfort of wearing their socket, Martin said.

6 “Sitting hurts. It’s jabbing up into your hip,” he The company employs more than 40 people said. “You’re sitting on it like a big, thick wallet at its two locations. underneath.” Gudgel said he wants to avoid growing more quickly than the company can handle, Martin said his imagination was sparked while even with goals of expanding its footprint working with NASA on a soft exoskeleton project. nationally within just two years.

“We had really challenging programs, but it drove “We’re being really smart and cognizant of some interesting discovery of new materials and not growing too fast,” he said. methods of how to connect man and machine with compliant dynamic materials,” Martin said. Some of Martin Bionics’ early cash came from the Oklahoma Center for the He compared his design to the difference Advancement of Science and Technology, between perfectly sculpted carbon fiber footwear or OCAST, a state government program that and a Nike athletic shoe. supports research and provides capital for young businesses. “And suddenly, comfort is now accessible,” Martin said. “In a conventional socket, if you gain or lose 5% of body weight, it no longer fits correctly.”

Martin Bionics was a prosthesis manufacturer and supplier, marketing to medical professionals before opening its first clinic last year. The company tested direct advertising, hoping to catch the attention of amputees. The response was overwhelming.

The company drew more than 250 leads during its 17-day Facebook ad campaign, and about half of those were eventually referred to a clinic.

“We’re literally suppressing our marketing so that it doesn’t get completely out of control,” said Blake Gudgel, CEO, Martin Bionics.

Martin Bionics Clinical Care, which caters directly to clients, launched in October 2018 at the company’s Bricktown headquarters. A second location opened five months ago in Austin, and a Dallas office will open early next year. During 2020, the company plans to open five more offices across the country.

7 1 1 1 1 1 1 1 Pawhuska 1 1 1 1 2 2 1 Oklahoma 1 1 Stroud Certified 1 4 Incubators 1 1 1 1

1 2 1

# Number of incubators in the area Support Services O ered Current Type of Tenant Number Incubator Location Businesses Capacity of Other Services Targeted Tenants Provided Computer Network Phone Service Business Planning Marketing Assistance Conference Room

Southwest Technology Altus Aviation 1 0 Center Business Mfg. and Incubator General Use

Northwest Technology Alva Mfg./ Mixed 2 0 Center Small Business Use Incubator

Tri-County Technology Bartlesville Mfg./Mixed 12 2 Internet access, Center Business Use Mail/message service, Assistance Center shared copier and fax, business counseling

RCIDA (Rogers County Chelsea Mfg./Mixed 1 1 Training, safety classes Industrial Development Use through NE Tech Authority) NE Tech Business Incubator

Central Oklahoma Drumright Mfg./Mixed 2 1 Business & Job Use Development Corporation

Duncan Center for Duncan Advanced 22 8 Business Development Mfg.

Francis Tuttle Edmond Mixed Use 12 8 The Launch Pad

Strate Center for Enid Mixed Use 12 5 Coaching, training and Business Development goverment contracting assistance

Major County Fairview Mfg./Mixed 6 4 Business guidance, Economic Use legal and Development advice, fax, copy, Business Incubator secretarial assistance

Caddo Kiowa Business Fort Cobb Mfg./Mixed 4 3 OBAN coordinator Development Center Use on site

Artist Incubation, Inc. Guymon Artists 2 1 X X X X X Gallery space, openings

Hobart Economic Hobart Mfg./Mixed 5 1 X X X X X Financing Development Authority Use Business Incubator

RCIDA / NE Tech Inola Mfg./Mixed 6 3 Shared fax and copier Business Incubator Use

Center for Emerging Lawton Technology 5 5 Students, interns, faculty, Technology and Based video, conferencing, Entrepreneurial Studies printer/copier/scanner - Cameron University

9 Support Services O ered Current Type of Tenant Number Incubator Location Businesses Capacity of Other Services Targeted Tenants Provided Computer Network Phone Service Business Planning Marketing Assistance Conference Room

Great Plains Lawton Mixed Use 24 13 X X X Business strategy Technology Center financial management

Startup 405 Norman Technology 6 2 X X X X -based

Acorn Growth Oklahoma Aerospace 10 3 X X X X X Financial planning, Companies City & Defense business development and capital

Moore Norman Oklahoma Mfg./Mixed 10 6 X X X X Business guidance and Technology Center City Use support, event Business Development promotion, financing, Center conference center

Project 3810 Oklahoma Mixed Use 10 5 X X X X Paint Booth City

The Catbird Seat Oklahoma Mfg./Mixed 6 0 X X X X Business guidance and UCO City Use support, event promotion, financing, conference center

RCIDA / NE Tech Oologah Mfg./Mixed 2 2 X X X Training, safety classes Business Incubator Use through NE Tech

Tri-County Technology Pawhuska Mixed 12 5 X X X Business guidance and Center Pawhuska Use support, event Incubator promotion, financing, conference center

Pioneer Technology Ponca Service 7 5 X X X Color copier, fax Center City and machine, receptionist LightMfg. on site management counseling, free business classes

Seminole Business Seminole Mixed Use 3 3 Development Center

Meridian Technology Stilllwater Technology 15 13 Website development, Center for Business or Innovative seed capital assistance, Development Process/ metnoring shared Service receptionist and clerical

Riata Startup Stilllwater OSU 20 15 Accounting and legal Experience Student-Led services, grant writing Ventures assistance and o–er funding assistance.

10 Support Services O ered Current Type of Tenant Number Incubator Location Businesses Capacity of Other Services Targeted Tenants Provided Computer Network Phone Service Business Planning Marketing Assistance Conference Room

Central Oklaoma Stroud Mfg. 1 1 X X Business and Job Development Corp

Tonkawa Business Tonkawa Mfg./Mixed 4 1 X X X X Incubator LLC Use

Hemphill Create Tulsa Mfg. 15 6 X X X Industrial warehouse / manufacturing space and services such as cutting steel and forklift operationg for tenants

The Forge Tulsa High Growth 6 4 X X X Milestone management, Mfg./Energy/ mentoring, business Tech coaching

Northwest Tech Small Waynoka Mfg. 1 1 X X X Business Incubator

11 900 N. Stiles Ave., Oklahoma City, OK 73104 • 405-815-6552 • 800-879-6552 • OKcommerce.gov